Sarla Auto Sales Thru.Proprietor Abhishek Yadav vs… — GST and Indirect Tax | Allahabad HC (2026)

Sarla Auto Sales Thru.Proprietor Abhishek Yadav vs… — GST and Indirect Tax | Allahabad HC (2026)

What the court decided

AI extract

Outcome

Writ petition allowed; impugned order dated 20.04.2024 set aside and matter remitted to respondent No. 2 to pass a fresh order; petitioner to file its final reply to the show cause notice within two weeks and thereafter appear before the assessing authority on the date fixed, whereafter the assessing authority may pass an appropriate reasoned order.

Issue for consideration

Whether the adjudication order passed pursuant to a Section 73(1) notice is vitiated because, although the petitioner was asked to file a written reply, it was never afforded the personal hearing mandated by Section 75(4) of the U.P. G.S.T. Act, 2017 before any adverse decision.

Court's answer

As per Section 75(4) of the U.P. G.S.T. Act, 2017, an opportunity of personal hearing has to be granted before any adverse decision against a registered person; since the Section 73(1) notice recorded 'NA' against date, time and venue of personal hearing, the petitioner was never afforded any opportunity of personal hearing.

Ratio / Principle

The rules of natural justice ingrained in the statute prescribe dual and independent requirements - submission of a written reply and an oral hearing; failure to avail one opportunity does not lead to denial of the other, and the two tests must be satisfied independently.

Key takeaways

The impugned order was passed contrary to the mandatory procedure; the procedural deficiency is self-apparent and critical to the outcome of the proceedings.ratio¶7
Given the admitted procedural lapse, no useful purpose would be served in keeping the petition pending, calling for counter affidavit at this stage, or relegating the petitioner to the forum of alternative remedy.ratio¶7

Detailed headnote1 paragraphs

GST - Denial of personal hearing - Under Section 75(4) of the U.P. G.S.T. Act, 2017, an opportunity of personal hearing must be granted before any adverse decision against a registered person. The Section 73(1) notice served on the petitioner marked 'NA' (Not Applicable) against the date, time and venue of personal hearing, showing the petitioner was never afforded an oral hearing. The statutory rules of natural justice impose dual, independent requirements - written reply and oral hearing - and failure to avail one does not deny the other. The adjudication order dated 20.04.2024, having been passed contrary to this mandatory procedure, was set aside; the writ petition was allowed and the matter remitted to respondent No. 2 for a fresh reasoned order after the petitioner files its final reply within two weeks.

HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW

WRIT TAX No. - 127 of 2026

Sarla Auto Sales Thru.Proprietor Abhishek Yadav

.....Petitioner(s)

Versus

State Of U.P. Thru. Prin. Secy. Institutional Finance Lko. And Another

.....Respondent(s)

Counsel for Petitioner(s) : Satish Kumar Pandey Counsel for Respondent(s) : C.S.C.

Court No. - 3

HON'BLE SHEKHAR B. SARAF, J. HON'BLE MANJIVE SHUKLA, J.

Having heard Shri Satish Kumar Pandey, learned counsel for the petitioner and learned Standing Counsel for the revenue, we find that as per Section 75 (4) of the U.P. G.S.T. Act, 2017 (hereinafter referred to as 'the Act') opportunity of personal hearing has to be granted before any adverse decision is taken against any person, here a registered person/petitioner.

Undeniably, the notice issued to the petitioner under Section 73(1) of the Act, which did intend to call for a reply from the petitioner but did not propose to grant personal hearing as the abbreviation "NA" was specified against the column "date of personal hearing". In that against the columns to specify the date of personal hearing, time of personal hearing and venue for personal hearing, the abbreviation "NA" i.e. 'Not Applicable' was recorded.

In view of the above position admitted on the record, the only conclusion possible to be drawn is that the petitioner was never afforded any opportunity of personal hearing.

Thus, upon service of notice, the petitioner had been called to file its reply only. Consequently, non-compliance of that show cause notice may have only led to closure of opportunity to submit written reply. However, by virtue of the express provision of Section 75 of the Act, even in that situation the petitioner did not lose its right to participate at oral hearing and establish at that stage itself that the adverse conclusions proposed to be drawn against

WTAX No. 127 of 2026

2

the petitioner, may be dropped.

In other words, the rules of natural justice as are ingrained in the statute prescribe dual requirement. First with respect to submission of written reply and the second with respect to oral hearing. Failure to avail one opportunity may not lead to denial of the other. The two tests have to be satisfied independently.

On merits, learned counsel for the petitioner further states that detailed reply was not required. The discrepancies in the returns as noticed by the adjudicating authority would have been clarified if opportunity of personal hearing had been granted.

In view of the above noted facts and reasons, we find no useful purpose may be served in keeping this petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy. The order impugned has been passed contrary to the mandatory procedure. The deficiency of procedure is self apparent and critical to the out-come of the proceedings.

Accordingly, the impugned order dated 20.04.2024 is set aside. Matter is remitted to the respondent No. 2 to pass a fresh order. In that regard the petitioner may file its final reply to the show cause notice within two weeks from date. Thereafter, the petitioner may appear before the assessing authority on the date fixed by the assessing authority, whereafter the assessing authority may pass appropriate reasoned order.

Accordingly, the writ petition is allowed .

(Manjive Shukla,J.) (Shekhar B. Saraf,J.)

February 4, 2026

Satish

Digitally signed by :- SATISH KUMAR BHARATI High Court of Judicature at Allahabad, Lucknow Bench